HÉROUX-DEVTEK REPORTS SECOND QUARTER RESULTS

• Sales of $83.2 million, compared with $76.6 million last year
• EBITDA of $10.8 million, versus $11.7 million a year ago
• Basic earnings per share of $0.09, compared with $0.11 last year
• Funded backlog of $574 million, up from $545 million three months ago

LONGUEUIL, QC, Oct. 29 /CNW Telbec/ - Héroux-Devtek Inc. (TSX: HRX), a leading Canadian manufacturer of aerospace and industrial products, today reported its results for the second quarter of fiscal 2011 ended September 30, 2010. Results include the contribution of Eagle Tool & Machine Co. ("Eagle") and of its subsidiary All Tools, Inc. ("E2"), acquired on April 28, 2010. It also includes restructuring charges of $269,000 before income taxes, equivalent to $0.01 per share net of income taxes, in connection with the closure of the Rivière-des-Prairies plant during the quarter. Unless otherwise indicated, all amounts are in Canadian dollars.

Consolidated sales for the second quarter were $83.2 million, an increase of 8.7% over sales of $76.6 million for the same period last year. Excluding a $13.5 million sales contribution from Eagle and E2, sales declined mainly due to lower landing gear repair and overhaul throughput and unfavourable currency impact. Earnings before interest, taxes, depreciation and amortization ("EBITDA"), excluding restructuring charges, were $10.8 million, or 13.0% of sales, compared with $11.7 million, or 15.3% of sales, last year. This essentially reflects the unfavourable impact of lower landing gear throughput on the absorption of manufacturing overhead costs. Operating income stood at $4.9 million, or 5.9% of sales, compared with $6.4 million, or 8.3% of sales, last year. Net income reached $2.6 million, or $0.09 per share ($0.08 diluted), compared with net income of $3.5 million, or $0.11 per share a year ago, mainly resulting from the manufacturing overhead cost absorption impact. Cash flow from operations amounted to $9.0 million this year, down from $11.7 million last year.

Fluctuations in the value of the Canadian dollar versus the US currency decreased second quarter sales by $2.6 million or 3.4%, compared with last year, but had a minimal impact on the Company's gross profit, which was mainly influenced by the under-absorption of manufacturing overhead costs. The impact of currency movements on the Company's gross profit is mitigated by the use of forward foreign exchange sales contracts and the natural hedging from the purchase of materials made in US dollars.

Financial highlights		Quarters ended September 30,		Six months ended September 30,
(in thousands of dollars, except per share data)		2010	2009	2010	2009
Sales		83,194	76,570	165,735	158,730
EBITDA		10,813	11,723	22,261	24,484
Operating income		4,934	6,358	10,517	13,829
Net income		2,556	3,518	5,739	8,060
	Per share - basic ($)	0.09	0.11	0.19	0.26
	Per share - diluted ($)	0.08	0.11	0.19	0.26
Cash flows from operations		8,978	11,657	19,245	23,487
Weighted-average shares outstanding (basic, in '000s)		30,007	30,645	30,122	30,795

"Our newly-acquired U.S. Landing Gear products operations had a solid contribution during the second quarter, which partially offset lower military repair and overhaul throughput in domestic Landing Gear products operations," said President and CEO Gilles Labbé. "While this lower throughput negatively impacted gross profit, the profitability of Aerostructure products operations improved, as we made proactive adjustments to reflect altered scheduling on the JSF and received increased orders for certain business jet programs. Meanwhile, Industrial sales reflected solid demand for heavy equipment from the mining sector."

As at September 30, 2010, Héroux-Devtek's balance sheet remained healthy with cash and cash equivalents of $29.4 million and long-term debt, including the current portion, of $101.9 million. As a result, the net debt-to-equity ratio stood at 0.33:1 at the end of the second quarter, compared with 0.35:1 three months earlier. The net-debt-to-equity ratio is defined as the total long-term debt, including the current portion, less cash and cash equivalents over shareholders' equity.

During the second quarter, Héroux-Devtek repurchased 59,100 common shares under its normal course issuer bid program at an average net price of $5.57 per share. This brings the total number of common shares repurchased under the program to 698,500 since November 2009 at an average net price of $5.69 per share. The program allows the Company to repurchase a maximum of 1.5 million common shares until November 24, 2010.

SEGMENT RESULTS
Aerospace sales reached $77.0 million in the second quarter of fiscal 2011 compared with $70.9 million last year. Sales of the Landing Gear product line increased 13.1% to $53.6 million reflecting the contribution of Eagle and E2. Excluding the acquisition, sales decreased 15.4%, as lower repair and overhaul throughput and engineering sales, as well as currency fluctuations, more than offset new business on the A-320, B-787 and Fokker programs. Aerostructure product sales were stable at $23.3 million, as reduced F-22 sales and unfavourable currency fluctuations were offset by greater activity for certain business jet programs. 

Industrial sales rose 10.0% to $6.2 million in the second quarter of fiscal 2011. This increase reflects solid demand for heavy equipment from the mining industry which more than offset soft conditions in the power generation industry.

SIX MONTHS RESULTS
For the first six months of fiscal 2011, consolidated sales amounted to $165.7 million, including a $20.6 million contribution from Eagle and E2, up from $158.7 million in fiscal 2010. Aerospace sales rose 4.7% to $153.0 million, while Industrial sales were 0.7% higher at $12.7 million. EBITDA reached $22.3 million, or 13.4% of sales, excluding restructuring charges of $637,000, versus $24.5 million, or 15.4% of sales, a year earlier, while operating income stood at $10.5 million, or 6.3% of sales, compared with $13.8 million, or 8.7% of sales, last year. Net income totalled $5.7 million, or $0.19 per share, versus $8.1 million, or $0.26 per share, in the prior year. Restructuring charges, net of income taxes, reduced net income by $0.02 per share in the first six months of fiscal 2011. Finally, cash flow from operations was $19.2 million, down from $23.5 million in the corresponding period a year earlier, mainly due to the reduced net income and future income tax variation impact.

RECENT EVENTS
On October 14, 2010, the Landing Gear product line was awarded additional orders for the manufacturing of landing gear components. These orders, essentially from the U.S. Air Force, are mainly for the B-1B, C-130, C-5 and F-15 aircraft. The combined value of the contracts is approximately Cdn$16.4 million, a majority of which was obtained by Eagle. Production will be spread out over the next four years, with deliveries beginning in the current fiscal year, ending March 31, 2011.

OUTLOOK
Conditions continue to improve in the commercial aerospace market. In the large commercial aircraft segment, Boeing and Airbus have announced production rate increase for the next three calendar years on leading programs and new orders have increased substantially in the first nine months of calendar 2010. The business jet market appears to have bottomed out and the industry is seeing positive signs. The military aerospace market, while still healthy, is stabilizing as governments address their deficits. As to the JSF program, the ramp-up continues, albeit at a slightly more moderate pace over the near term. In Canada, the Government's decision to purchase 65 JSF aircraft should also benefit the Canadian aerospace industry. The North American power generation industry appears to have bottomed out, as leading equipment manufacturers have reported rising new orders. While no significant recovery is expected in the short-term, renewable energy sources, including wind, still hold considerable potential over the mid-term.

As at September 30, 2010, Héroux-Devtek's funded (firm orders) backlog was $574 million, up from $545 million three months ago, and remains well diversified.

"Héroux-Devtek is in a stronger competitive position than before the recession. Our expanded North American network, strong customer relationships, healthy balance sheet and constant drive to improve efficiency and productivity firmly position the Company as a leader in its core markets. The contribution from Eagle and E2, scheduled production rate increases on large commercial aircraft programs and the ramp-up of the JSF will positively influence Héroux-Devtek's operating results for the remainder of fiscal 2011 and beyond. We continue to anticipate a stronger second half for fiscal 2011 with sales approximately 15% to 20% higher when compared with the first half of the year, assuming no major change in the average exchange rate," concluded Mr. Labbé.

CONFERENCE CALL
Héroux-Devtek Inc. will hold a conference call to discuss these results on Friday, October 29, 2010 at 10:00 A.M. Eastern Time. Interested parties can join the call by dialling [phone] (Montreal or overseas) or 1-866-865-3087 (elsewhere in North America). The conference call can also be accessed via live webcast at Héroux-Devtek's website, www.herouxdevtek.com, www.newswire.ca or www.q1234.com.

If you are unable to call in at this time, you may access a tape recording of the meeting by calling 1-800-642-1687 and entering the passcode 16026731 on your phone. This tape recording will be available on Friday, October 29, 2010 as of 1:00 PM Eastern Time until 11:59 PM Eastern Time on Friday, November 5, 2010.

PROFILE
Héroux-Devtek (TSX: HRX), a Canadian company, serves two main market segments: Aerospace and Industrial Products, specializing in the design, development, manufacture and repair and overhaul of related systems and components. Héroux-Devtek supplies both the commercial and military sectors of the Aerospace segment with landing gear systems (including spare parts, repair and overhaul services) and airframe structural components. The Company also supplies the industrial segment with large components for power generation equipment and precision components for other industrial applications. Approximately 70% of the Company's sales are outside Canada, mainly in the United States. The Company's head office is located in Longueuil, Québec with facilities in the Greater Montreal area (Longueuil, Dorval and Laval); Kitchener and Toronto, Ontario; Arlington, Texas; as well as Springfield, Cleveland and Cincinnati, Ohio.

FORWARD-LOOKING STATEMENTS
Except for historical information provided herein, this press release may contain information and statements of a forward-looking nature concerning the future performance of the Company. These statements are based on suppositions and uncertainties as well as on management's best possible evaluation of future events. Such factors may include, without excluding other considerations, fluctuations in quarterly results, evolution in customer demand for the Company's products and services, the impact of price pressures exerted by competitors, and general market trends or economic changes. As a result, readers are advised that actual results may differ from expected results.

NON-GAAP MEASURES
Earnings before interest, taxes, depreciation and amortization ("EBITDA") and cash flows from operations are financial measures not prescribed by Canadian generally accepted accounting principles ("GAAP") and are not likely to be comparable to similar measures presented by other issuers. Management, as well as investors, considers these to be useful information to assist them in evaluating the company's profitability, liquidity and ability to generate funds to finance its operations.

Note to readers:

Complete unaudited consolidated financial statements and Management's Discussion & Analysis are available on Héroux-Devtek's website at www.herouxdevtek.com.

For further information:

From:	Héroux-Devtek Inc. Gilles Labbé President and Chief Executive Officer Tel.: [phone]
Contact:	Héroux-Devtek Inc. Réal Bélanger  Executive Vice-President and Chief Financial Officer    Tel.: [phone]	MaisonBrison Martin Goulet, CFA Tel.: [phone]